S corporation income tax return to reconcile book

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Unformatted text preview: Corp. All rights reserved. R 3-01 Maxixishere Pdf Collection Becker CPA Review, PassMaster Questions Lecture: Regulation 3 In the current year, Brown, a C corporation, has gross income (before dividends) of $900,000 and deductions of $1,100,000 (excluding the dividends received deduction). Brown received dividends of $100,000 from a Fortune 500 corporation during the current year. What is Brown's net operating loss? a. b. c. d. $100,000 $130,000 $170,000 $200,000 CPA-05294 RULES: Explanation A net operating loss (NOL) for corporations is the excess of deductions over gross income; however, the dividends received deduction is allowed to be deducted before calculating the NOL. The dividends received deduction (DRD) for entities that are controlled 0% to <20% (which is how a Fortune 500 corporation would be controlled) is the LESSER of 70% of dividends received or 70% of taxable income computed without regard to the DRD, and NOL deduction, or any capital loss carryback (but this does not apply in the case when deducting the full DRD results in an NOL). Choice "c" is correct. Applying the rules...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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